My plan:
Indices futures gaped up on BOJ's QE. ES is up 23 points right now before open. This gap basically avoid all the resistant to the last all time high. I don't remember if I have seen such a big gap up.
Grains gaped down overnight. I will try to exit some bear calls and may be enter some bull puts in soybean and corn. According to 2009's monthly charts the lows were set on Dec and Jan for corn and soybean. Wheat has a seasonal low in Dec if the seasonal of 5, 10 yr hold true. I need to have enough patience to wait it out. I should not add any major positions in grains except balancing and locking in profit. There will be another big movement come.
Another 1% move up in indices. It appears indices are ready to break into new highs. They had a small range today but holding up well. I tried to place some bear calls in at least 1STD and 90% OTM probability but no fill. I will wait for it to break out again next week. I have learned to be more patience now. My 2005 and 2015 bear calls are deeply under water now. I placed stop loss orders at half gap fill but there was no any meaningful pull backs. I have two week to let the market calm down but risking it staying up. I will watch it carefully and play my odd.
Friday, October 31, 2014
Thursday, October 30, 2014
Against Fed? 10-30-14
I missed to write down today's plan after a delayed morning Trader Bite.
Fed ended QE 3 with some hawkish words regarding rate yesterday. Indices went down modestly yesterday. The general mood was bearish this morning. However market kept pushing up with a better than expected GDP at 3.5% v.s. estimated 3.1%. Earnings were good too. Month end window dressing and seasonality might help the market to stay up.
I made a mistake letting an error filled PUT call spread of 1150/60 stayed for two weeks. It got pushed ITM yesterday briefly yesterday. My exit order got filled 4 out of 5 in the morning push down. I had to cancel the order and exit the pair separately and took a loss on it. Overall it was a $100 loss but the lesson is big. A. Correct a mistake as soon as possible. A profitable mistake is still a mistake. Not correcting it would reinforce a bad habit and break discipline.
B. Don't count on your luck on expiration week when my positions are near the money. I remember I got burned several times before playing scalp near the expiration date.
Grains had pull back after yesterday's advances. I had to take stops in my soybean and wheat bear calls. I also bought calls in soybean and wheat for next month to hedge my bear calls. I am still no clear pictures of the grain market. May be I should step aside to clear my head and let the market tell me where it is going. Otherwise, I am keep losing money by fighting to recover. I broke my rules of stopping out and let several positions sinking deeper in the water. The paper loss in soybean and wheat bear calls are over $10K now. I need to preserve my capital in order to survive and recover.
Fed ended QE 3 with some hawkish words regarding rate yesterday. Indices went down modestly yesterday. The general mood was bearish this morning. However market kept pushing up with a better than expected GDP at 3.5% v.s. estimated 3.1%. Earnings were good too. Month end window dressing and seasonality might help the market to stay up.
I made a mistake letting an error filled PUT call spread of 1150/60 stayed for two weeks. It got pushed ITM yesterday briefly yesterday. My exit order got filled 4 out of 5 in the morning push down. I had to cancel the order and exit the pair separately and took a loss on it. Overall it was a $100 loss but the lesson is big. A. Correct a mistake as soon as possible. A profitable mistake is still a mistake. Not correcting it would reinforce a bad habit and break discipline.
B. Don't count on your luck on expiration week when my positions are near the money. I remember I got burned several times before playing scalp near the expiration date.
Grains had pull back after yesterday's advances. I had to take stops in my soybean and wheat bear calls. I also bought calls in soybean and wheat for next month to hedge my bear calls. I am still no clear pictures of the grain market. May be I should step aside to clear my head and let the market tell me where it is going. Otherwise, I am keep losing money by fighting to recover. I broke my rules of stopping out and let several positions sinking deeper in the water. The paper loss in soybean and wheat bear calls are over $10K now. I need to preserve my capital in order to survive and recover.
Wednesday, October 29, 2014
FOMC 10-29-14
My plan:
1. Indices have had no meaningful pull back overnight and after open. I will try to use any pull back to exit my bear call positions in SPX and RUT before 2PM. One hour after the FOMC release I would plan to take other bear call positions or bull put positions to recover some of my losses.
2. Grains are in consolidation mode again. I will add bull puts or calls of Dec, Jan for corn, sb and Mar, May for wheat. Also take out some bear calls which are under water.
Indices retreated after initial push up. It was lucky for me to exit most of the positions I wanted to get out. I was able to enter a ES bull put in S-5 acct on the 2nd push down after the announcement. But none of my spreads got filled. I will wait to see how the GDP number is like tomorrow and job numbers on Friday. Market reaction was not as strong as many other times. I guess people were prepared for the end of QE3.
Grains continued to move up against the large production numbers. I am getting frustrated and stressed for failing to recognize the changing trend and act properly. I got slapped left and right. I didn't follow my plan to get in calls. Instead I exited my existing calls in corn and wheat prematurely. I need pay more attentions to the bigger pictures. Changing day trading mentality and looking at daily open and close for trend to plan my trade instead of the hourly movements.
1. Indices have had no meaningful pull back overnight and after open. I will try to use any pull back to exit my bear call positions in SPX and RUT before 2PM. One hour after the FOMC release I would plan to take other bear call positions or bull put positions to recover some of my losses.
2. Grains are in consolidation mode again. I will add bull puts or calls of Dec, Jan for corn, sb and Mar, May for wheat. Also take out some bear calls which are under water.
Indices retreated after initial push up. It was lucky for me to exit most of the positions I wanted to get out. I was able to enter a ES bull put in S-5 acct on the 2nd push down after the announcement. But none of my spreads got filled. I will wait to see how the GDP number is like tomorrow and job numbers on Friday. Market reaction was not as strong as many other times. I guess people were prepared for the end of QE3.
Grains continued to move up against the large production numbers. I am getting frustrated and stressed for failing to recognize the changing trend and act properly. I got slapped left and right. I didn't follow my plan to get in calls. Instead I exited my existing calls in corn and wheat prematurely. I need pay more attentions to the bigger pictures. Changing day trading mentality and looking at daily open and close for trend to plan my trade instead of the hourly movements.
Tuesday, October 28, 2014
Strong Bulls for FOMC? 10-28-14
My plan:
Futures raised up overnight during European session. It looks like a gap up open again. I will manage my risk and not establish any new positions in indices before tomorrow's FOMC.
Grains were up overnight also. Soybean and wheat are pulling back after open to test prior day's highs. Corn has a bigger gap to fill. I looked at 2009's charts and plan to play the uptrend of Nov, Dec. I will manage my risk of bear calls for these months.
ES/SPX had a slow morning and strong afternoon with another 1% gain. RUT was even stronger with 3+% gain. All of my bear calls expiring this week are near the money and underwater now. It seams that market is expecting a positive outcome and don't mind of the end of QE 3. Is it possible the pros are setting up another sell off? It's possible but unlikely base on the seasonality. I tried to exit my bear call positions in hope of beak even or with small profit but indices never looked back. I will have to get ready to take losses tomorrow not waiting after FOMC. Most of my losses in indices have been bear calls since 2013. I have not learned enough of waiting for a good level to enter. I must change this bad habit of jumping in without much patience.
Grains went up higher overnight but came back closed their gaps during RTH. They all closed around yesterday's high. It looks like the up trend will continue. I bought couple calls for wheat and puts for corn of this month. I may buy soybean calls tomorrow on a pull back.
Futures raised up overnight during European session. It looks like a gap up open again. I will manage my risk and not establish any new positions in indices before tomorrow's FOMC.
Grains were up overnight also. Soybean and wheat are pulling back after open to test prior day's highs. Corn has a bigger gap to fill. I looked at 2009's charts and plan to play the uptrend of Nov, Dec. I will manage my risk of bear calls for these months.
ES/SPX had a slow morning and strong afternoon with another 1% gain. RUT was even stronger with 3+% gain. All of my bear calls expiring this week are near the money and underwater now. It seams that market is expecting a positive outcome and don't mind of the end of QE 3. Is it possible the pros are setting up another sell off? It's possible but unlikely base on the seasonality. I tried to exit my bear call positions in hope of beak even or with small profit but indices never looked back. I will have to get ready to take losses tomorrow not waiting after FOMC. Most of my losses in indices have been bear calls since 2013. I have not learned enough of waiting for a good level to enter. I must change this bad habit of jumping in without much patience.
Grains went up higher overnight but came back closed their gaps during RTH. They all closed around yesterday's high. It looks like the up trend will continue. I bought couple calls for wheat and puts for corn of this month. I may buy soybean calls tomorrow on a pull back.
Monday, October 27, 2014
Inside Day 10-27-14
My plan:
1. ES opened slightly higher on Sunday night but pulled back overnight after European open. It ranged from 1965 to 1950.25.
I didn't finish my daily plan in the morning since I had to pick up Alissa from a doctor's appointment at 11:30am, then pick her up again from school at 3:30.
ES/SPX consolidated on upper part profile of last Friday with a 15 point range. The hourly up trend was held from a sell off in the morning. It appears in a upward pattern waiting for FOMC this Wed. I tried to exit my ES 2005 and SPX 2000 spread but no fill. I will try it more aggressively tomorrow. I don't want to end with a big loss with FOMC surge.
Grains recovered from last Friday's sell off. Soybean and corn were fully recovered. Wheat had about 50% retrace. I need to look more seriously on up side potential now. If the seasonal hold true for this yr then the lows were done already. I want to look for historical charts of 2003 and 09 which both were record production year.
1. ES opened slightly higher on Sunday night but pulled back overnight after European open. It ranged from 1965 to 1950.25.
I didn't finish my daily plan in the morning since I had to pick up Alissa from a doctor's appointment at 11:30am, then pick her up again from school at 3:30.
ES/SPX consolidated on upper part profile of last Friday with a 15 point range. The hourly up trend was held from a sell off in the morning. It appears in a upward pattern waiting for FOMC this Wed. I tried to exit my ES 2005 and SPX 2000 spread but no fill. I will try it more aggressively tomorrow. I don't want to end with a big loss with FOMC surge.
Grains recovered from last Friday's sell off. Soybean and corn were fully recovered. Wheat had about 50% retrace. I need to look more seriously on up side potential now. If the seasonal hold true for this yr then the lows were done already. I want to look for historical charts of 2003 and 09 which both were record production year.
Saturday, October 25, 2014
Weekly Review 10-25-14
Indices staged a most impressive come back of the year after a 6+% down, the steepest sell off of the year. I came out unscratched with couple of early exits of small profits. I started to experiment selling naked SPX and RUT after watched Super Trader Karen's another video interview discussing her set up perimeters. I was under the impression that SPX, RUT required much higher margin. I didn't realize that portfolio margin reduced it drastically. Even it's at a full margin I can get much higher premium for it. I will not trade naked options exclusively but it's a good tool in my tool box. I will continue to trade credit spread in my Etrade and IB personal account, possibly my IRA accounts too.
Grains Oct options expired this Friday. All of my mistakes revealed with bunch of worthless puts. I failed to manage these positions correctly and let them turned from profit to losses.
1. Held and hoped. I had a strong belief that the grains would have set a new low after WASDE report on Oct 10. It was based on seasonality and experts opinions. One of very important skill in trading is to switch views and change plan base on price actions and market conditions. Be flexible and objective.
2. I didn't have a "what if" scenario in place. I didn't set a price level or profit percentage to decide my exit point.
3. I didn't have a clear plan for these positions, not even on how to take or protect profit. I was thinking to maximize my return and recover my losses. My corn puts were more than recovery my corn losses at one time. I was thinking about exit some positions to insure my recovery. I then, thought to use the profit in corn puts to help out on wheat and soybean. It was greedy took over.
It was a profitable week with $3600. I had over 50 positions built in couple months. But the way I handled grain options was very costly mistakes. I missed at least $6K profit and lost near $4K on top of it. I would have been disciplined or fired if I was employed in a business.
Steps of improvement from the mistakes:
A. Be ware of my mental state and emotions. When I am strongly believe a market direction or my trading results it's time to have a "what if" plan in place. Be ready to change my view and take actions.
B. Leave greed and fear out of trading. Like Karen said, It's a number game. Taking profit and stop loss are numbers, not emotions.
C. Use technical indicators and charts to help take profit and stop loss.
D. Start to look for trading pals with similar trading product and types.
Grains Oct options expired this Friday. All of my mistakes revealed with bunch of worthless puts. I failed to manage these positions correctly and let them turned from profit to losses.
1. Held and hoped. I had a strong belief that the grains would have set a new low after WASDE report on Oct 10. It was based on seasonality and experts opinions. One of very important skill in trading is to switch views and change plan base on price actions and market conditions. Be flexible and objective.
2. I didn't have a "what if" scenario in place. I didn't set a price level or profit percentage to decide my exit point.
3. I didn't have a clear plan for these positions, not even on how to take or protect profit. I was thinking to maximize my return and recover my losses. My corn puts were more than recovery my corn losses at one time. I was thinking about exit some positions to insure my recovery. I then, thought to use the profit in corn puts to help out on wheat and soybean. It was greedy took over.
It was a profitable week with $3600. I had over 50 positions built in couple months. But the way I handled grain options was very costly mistakes. I missed at least $6K profit and lost near $4K on top of it. I would have been disciplined or fired if I was employed in a business.
Steps of improvement from the mistakes:
A. Be ware of my mental state and emotions. When I am strongly believe a market direction or my trading results it's time to have a "what if" plan in place. Be ready to change my view and take actions.
B. Leave greed and fear out of trading. Like Karen said, It's a number game. Taking profit and stop loss are numbers, not emotions.
C. Use technical indicators and charts to help take profit and stop loss.
D. Start to look for trading pals with similar trading product and types.
Friday, October 24, 2014
Tireless Bulls 10-24-14
My Hypotheses and Plan:
1. ES/SPX: ES held up well overnight range from 1932-1947. It looks ready to challenge yesterday's high of 1955 which is the lower edge of a CHVA. Are we going to have a pull back or blast off day? My upper target is at 1961 which would bring ES into the CHVA. The down side is first at overnight low of 1932 and gap fill of 1925. Market could be spooked on Ebola news or anything else. I will try some credit spread in Etrade and IB small acct to establish positions for Nov.
2. Grains options expiring today for Oct's contracts. Their up trend is still in place. I will mainly watch my positions and take stops on Monday to let prices erode a bit more.
Today's ES/SPX price action reminded me of last fall, 2013. It was up 8 weeks in a roll starting in Oct as well. It's near the break down point now but still below BBM weekly. I didn't have any trade in indices. I am waiting for prices to get to Fib 78% or close above BBM weekly to sell bear calls or sell bull puts on any pull backs.
Grains had sharp selling on this option expiration day. It's totally a professional play which I suspected but didn't know how to play it. The three majors closed at their low of the day indicating possible further selling next week. My Oct grain options results were terrible. It revealed many of my weaknesses in trading. I will review them in my weekly review tomorrow.
1. ES/SPX: ES held up well overnight range from 1932-1947. It looks ready to challenge yesterday's high of 1955 which is the lower edge of a CHVA. Are we going to have a pull back or blast off day? My upper target is at 1961 which would bring ES into the CHVA. The down side is first at overnight low of 1932 and gap fill of 1925. Market could be spooked on Ebola news or anything else. I will try some credit spread in Etrade and IB small acct to establish positions for Nov.
2. Grains options expiring today for Oct's contracts. Their up trend is still in place. I will mainly watch my positions and take stops on Monday to let prices erode a bit more.
Today's ES/SPX price action reminded me of last fall, 2013. It was up 8 weeks in a roll starting in Oct as well. It's near the break down point now but still below BBM weekly. I didn't have any trade in indices. I am waiting for prices to get to Fib 78% or close above BBM weekly to sell bear calls or sell bull puts on any pull backs.
Grains had sharp selling on this option expiration day. It's totally a professional play which I suspected but didn't know how to play it. The three majors closed at their low of the day indicating possible further selling next week. My Oct grain options results were terrible. It revealed many of my weaknesses in trading. I will review them in my weekly review tomorrow.
Thursday, October 23, 2014
Raging Bulls 10-23-14
My hypotheses and plan:
1. ES/SPX: ES got pushed back to yesterday's high of 1940 area in European session. It looks ready to challenge the Fib 62% area again. The next upper target is around 1950. The downside is 1921 and 1913.
I will try to sell SPX naked for the first time after watched Karen, the Super Trader's video again.
2. Grains are up at open with strong export data. I will close some of my bull puts to lock in profit and re-enter them later. The primary trend is still down unless price action changes the picture. The lows should be in according to seasonality but the record high production numbers are not fully reported yet. Trade with what you see not what you believe.
Bulls have been very made at the last valiant sell off. Indices had another 1+% up day which recorded last 5 out of 6 days. I started to experiment selling naked SPX and RUT base on Karen's set up. Her main rules are, Starting at 50-60 days out, Out of money in 2 standard deviations for puts and at least 1 STD for calls, her Delta is around 0.5 and won't adjust a positions unless the delta is up to 3. She exit her positions at 50% profit for near by month and let current month positions expire worthless depending on volatility.
It turned out the margin requirement is much less than I expected. I had a $1000 margin for a $780 premium puts. I guess because I have some other credit spreads and commodity positions helped to off set the full margin requirement. I will have to experiment the margin requirement more. Even with full margin of $17K per SPX contract I will be better off if I can collect $700 premium. One thing is that SPX spread is bigger for far OTM. I will have to learn more about selling SPX and pursue it with caution. I am only trading one lot at a time now.
Grains continue to push up on strong export report and slow harvesting progress.
I am getting ready to take stops for my bear calls in soybean and wheat. I followed my plan to lock in my profitable positions in wheat and soybean. I will re-enter them once the prices come down. I am OK if the prices don't come down again and the bottom is set. I will trade other months contracts to recover some of my losses.
Overall, I followed my plan well today except I was hesitated to take stops of my underwater bear calls in wheat and soybean. Remember they can be very volatile and persistent in one direction.
1. ES/SPX: ES got pushed back to yesterday's high of 1940 area in European session. It looks ready to challenge the Fib 62% area again. The next upper target is around 1950. The downside is 1921 and 1913.
I will try to sell SPX naked for the first time after watched Karen, the Super Trader's video again.
2. Grains are up at open with strong export data. I will close some of my bull puts to lock in profit and re-enter them later. The primary trend is still down unless price action changes the picture. The lows should be in according to seasonality but the record high production numbers are not fully reported yet. Trade with what you see not what you believe.
Bulls have been very made at the last valiant sell off. Indices had another 1+% up day which recorded last 5 out of 6 days. I started to experiment selling naked SPX and RUT base on Karen's set up. Her main rules are, Starting at 50-60 days out, Out of money in 2 standard deviations for puts and at least 1 STD for calls, her Delta is around 0.5 and won't adjust a positions unless the delta is up to 3. She exit her positions at 50% profit for near by month and let current month positions expire worthless depending on volatility.
It turned out the margin requirement is much less than I expected. I had a $1000 margin for a $780 premium puts. I guess because I have some other credit spreads and commodity positions helped to off set the full margin requirement. I will have to experiment the margin requirement more. Even with full margin of $17K per SPX contract I will be better off if I can collect $700 premium. One thing is that SPX spread is bigger for far OTM. I will have to learn more about selling SPX and pursue it with caution. I am only trading one lot at a time now.
Grains continue to push up on strong export report and slow harvesting progress.
I am getting ready to take stops for my bear calls in soybean and wheat. I followed my plan to lock in my profitable positions in wheat and soybean. I will re-enter them once the prices come down. I am OK if the prices don't come down again and the bottom is set. I will trade other months contracts to recover some of my losses.
Overall, I followed my plan well today except I was hesitated to take stops of my underwater bear calls in wheat and soybean. Remember they can be very volatile and persistent in one direction.
Wednesday, October 22, 2014
Reversal? 10-22-14
My plan:
1. ES/SPX: Upside target: 1963-1971 on CHVN, test previous B/O area, +6 points for SPX. I will sell bear call spread on resistance area.
Downside: ES 1930 O/N low, 1922 PP, Will sell bull put in this area.
2. RUT. Currently at 1112, my 1120 bear call spreads are endanger which expire tomorrow. I will try to exit on any weakness.
3. Grains are up again overnight. Check and update seasonal, reevaluate my positions and plan. Try to lock in some profit for these far out of money and time positions.
Started my morning plan today. It was some what rushed.
ES/SPX pushed to Fib 62% RT and got pushed down as expected. The sell off wasn't severer. I started to look for 8% out bull put spread but no fill.
RUT had a pull back also which help me to exit out my near money position. I exited out better than expected with a 40% profit.
Grains had a reversal day at end of the session. But they are still in their slightly short term up trends. I feel getting slapped left and right. I will lock in profits for couple of my bean and wheat next spring positions. I have tried for two days but no fills yet.
1. ES/SPX: Upside target: 1963-1971 on CHVN, test previous B/O area, +6 points for SPX. I will sell bear call spread on resistance area.
Downside: ES 1930 O/N low, 1922 PP, Will sell bull put in this area.
2. RUT. Currently at 1112, my 1120 bear call spreads are endanger which expire tomorrow. I will try to exit on any weakness.
3. Grains are up again overnight. Check and update seasonal, reevaluate my positions and plan. Try to lock in some profit for these far out of money and time positions.
Started my morning plan today. It was some what rushed.
ES/SPX pushed to Fib 62% RT and got pushed down as expected. The sell off wasn't severer. I started to look for 8% out bull put spread but no fill.
RUT had a pull back also which help me to exit out my near money position. I exited out better than expected with a 40% profit.
Grains had a reversal day at end of the session. But they are still in their slightly short term up trends. I feel getting slapped left and right. I will lock in profits for couple of my bean and wheat next spring positions. I have tried for two days but no fills yet.
Tuesday, October 21, 2014
Best and Worst Days in Oct 10-21-14
ES and NQ had 2% up today, their best performing day in last three years following their worst day in less than a week ago. I followed my plan to exit my SPX 1880 bull credit spread with a 35% profit. I could have got more out of it but it wasn't my plan. So I am happy with it. I entered two ES bear calls puts for Nov week 2 and 3 right at 2005 and 2015 when SPX near FIB 62 RT of the sell off. They looked a little premature now. I will manage my risk accordingly. I tried SPX bear put spreads but no fill. I will wait for a better time and place them above the all time high.
RUT is up to trap the bears now. My bear call spread of 1120 is endanger of ITM now despite only two days left. It looked so promising during that down turn. I have to find out the expiration settlement process and decide if I should take a stop tomorrow.
Grains were up cross board again today. I still don't have a clear picture of the trend nor a strategy for grains. I bought a wheat call for Dec to hedge my puts and corn, soybean puts expecting the down trend would continue. I am still upset that I let most of my Oct puts slipped into losses. This emotion may have clouded my judgement. Watch out for revenge driven actions. My subconscious is telling me to step back and clear my head first.
I didn't get my morning plan done today. I was pulled into actions immediately this morning. I will try to form a habit to plan in the morning.
RUT is up to trap the bears now. My bear call spread of 1120 is endanger of ITM now despite only two days left. It looked so promising during that down turn. I have to find out the expiration settlement process and decide if I should take a stop tomorrow.
Grains were up cross board again today. I still don't have a clear picture of the trend nor a strategy for grains. I bought a wheat call for Dec to hedge my puts and corn, soybean puts expecting the down trend would continue. I am still upset that I let most of my Oct puts slipped into losses. This emotion may have clouded my judgement. Watch out for revenge driven actions. My subconscious is telling me to step back and clear my head first.
I didn't get my morning plan done today. I was pulled into actions immediately this morning. I will try to form a habit to plan in the morning.
Got Some Relief 10-2-14
Equities maintained upward posture despite IBM's poor earning report. ES had a 26 point range. VIX came down filled most of my exit orders. I am fairly safe in this front now. It was a lesson learned on volatility. It can jump quickly and put you positions deeply underwater. In order to trade VIX well one must be patiently waiting for a surge of several days before getting in. I waited in later September which helped some. Last week's sell off threatened me with a big loss. I was lucky to ride it out but violated my rules of stop loss. I listened to Options Boot Camp podcast again this weekend. I should trade less VIX. I still have couple of SPX bull put spreads at risk. I will try to exit them in next 2 days as SPX approaching Fib 62RT now.
Grains went down after Sunday night open. Some of my stop loss and profit taking orders got filled before noon. Grains recovered most of losses after export report and opened high this evening with the harvest progress report. I felt lost in grains directions and frustrated today. The retest low or a new low have not materialized since the WASDE report while I let my puts profit slipped away. I need to step back and reevaluate the trends and my approach to grain market. My head is not clear now.
I am going to try to make my daily hypotheses and plan in the morning instead of prior night starting tomorrow. It may give me a refreshed look at the market and may be better memory and discipline too.
Grains went down after Sunday night open. Some of my stop loss and profit taking orders got filled before noon. Grains recovered most of losses after export report and opened high this evening with the harvest progress report. I felt lost in grains directions and frustrated today. The retest low or a new low have not materialized since the WASDE report while I let my puts profit slipped away. I need to step back and reevaluate the trends and my approach to grain market. My head is not clear now.
I am going to try to make my daily hypotheses and plan in the morning instead of prior night starting tomorrow. It may give me a refreshed look at the market and may be better memory and discipline too.
Saturday, October 18, 2014
Weekly Review 10-18-14
We had a wild, high volatility week since 2012. VIX reached 31 and closed at 22 by Friday. Most of my bull puts spreads in SPX and ES naked puts were underwater during the week. I took stops of SPX and ES for this week's expiration. It ended with $620 loss for the week which is acceptable. Even with Friday's big run up the SPX/ES are still below their 200 SMA and BB/M daily. The run up was sold at FIB 50% RT yesterday. Bears have a shot to run it down for next couple weeks or let it up to Fib 62%. On the bright side, ES/SPX closed above 50 MA on weekly chart. This provided support for the last few pull backs. Only time will tell if it will hold this time.
Grains continued to move up in small paces after last Friday's USDA report. This unexpected movement eroded most of my profit in puts. I was so stubbornly believed there was going to be new lows after the report. I didn't believe what I saw in the move up nor was I prepared to take actions to protect my profit. I didn't have a 2nd scenarios and action plan in place until Wednesday. By that time my only goal was to break even. My stupidity cost me at least $5000 and turning a very profitable holdings to losing. I thought about taking some chips off table before and right after the USDA report. My greed and the desire of revenge held me to admit I could be wrong. This losing event combine with the summer's big loss in grains really affected my confidence in trading success. I know the issue is the courage to take hard stops but I have not been able to overcome it time after time. Do I want to become successful in this business? If the answer is yes then I have to take hard stops no matter what. Not to come up with different solutions or ideas every time when I need to take stops. If I can't do it I will be better off to quite it now to save my capitals.
My plan for next week:
1. Have at least two different scenarios and action plans for each market I am trading. Be clearly identify the levels for confirmation of each hypotheses in play.
2. Practice to change my market views base on what is happening not what I believe will happen.
3. Ready to take hard stops at 1.5 to 3X loss. Stop first and recover orders later.
4. No add on to any losing positions. Only rollover or leg up/down are allowed.
Grains continued to move up in small paces after last Friday's USDA report. This unexpected movement eroded most of my profit in puts. I was so stubbornly believed there was going to be new lows after the report. I didn't believe what I saw in the move up nor was I prepared to take actions to protect my profit. I didn't have a 2nd scenarios and action plan in place until Wednesday. By that time my only goal was to break even. My stupidity cost me at least $5000 and turning a very profitable holdings to losing. I thought about taking some chips off table before and right after the USDA report. My greed and the desire of revenge held me to admit I could be wrong. This losing event combine with the summer's big loss in grains really affected my confidence in trading success. I know the issue is the courage to take hard stops but I have not been able to overcome it time after time. Do I want to become successful in this business? If the answer is yes then I have to take hard stops no matter what. Not to come up with different solutions or ideas every time when I need to take stops. If I can't do it I will be better off to quite it now to save my capitals.
My plan for next week:
1. Have at least two different scenarios and action plans for each market I am trading. Be clearly identify the levels for confirmation of each hypotheses in play.
2. Practice to change my market views base on what is happening not what I believe will happen.
3. Ready to take hard stops at 1.5 to 3X loss. Stop first and recover orders later.
4. No add on to any losing positions. Only rollover or leg up/down are allowed.
A Big Pop 10-17-14
Indices popped up after European session started. We had a 16 points gap up in ES by the time US market opened. There was another 20 points up from open to noon time. Then came to the pull back when it touched daily Fib 50% RT. Volatility is still high. I didn't get any of my credit spread or VIX filled. I only exited one ES expiring today to free margin for another order. The new order entry proved to be conservative in price even it was 160 points and only 2 weeks away.
Grains finally had a pull back before the weekend. I closed 6 of my puts with mixed results. I really mismanaged this month's puts and made a fool of myself. I will analyze my mistakes on my weekly review tomorrow. I am still not handling my emotions and decision making process well enough to get consistent results.
Grains finally had a pull back before the weekend. I closed 6 of my puts with mixed results. I really mismanaged this month's puts and made a fool of myself. I will analyze my mistakes on my weekly review tomorrow. I am still not handling my emotions and decision making process well enough to get consistent results.
Friday, October 17, 2014
Double Bottoms 10-16-14
Indices retested their lows of yesterday early in the session and bounced. ES has had two consecutive 50 point range sessions. It appears a double bottoms held for the time being. Weekly chart still looks bearish but not finished until tomorrow. Tomorrow is this month's options expiration day and usually wild. I would exit my VIX 23, 25 and couple more bull put spreads if we get another decent bounce. I may also sell of bear calls which I didn't get fill today except a set of RUT 1160 bear call spread in Etrade. I closed this week's SPX bull put spread of 1850 for a 1X loss. I followed my plan and feel good about it. I will become a successful trader only when I can follow my rules decisively.
Soybean and corn had a slight up day but are still a consolidation mode. Wheat popped another 10 points on Australia weather and Brazil wheat demand. I feel so bad to let most of my winning puts become lessors just because I believe they will go down after last Friday's USDA report. I refused to change my market views when prices kept going up and seasonal windows passed. I was heavily influenced by Arlan and Walsh's "expert commentaries". The retest of lows may still come but not in my time frame.
My plan for tomorrow:
1. ES/SPX, We may still get a range day with upside bias due to the option expiration. A downward test is also possible with any bad new and the market is still nervous. Many people think the selling is not over yet. I looked back SPX pull back from 2012. Most of them lasted 4-6 weeks. We are in our 4th weeks now. My ES/SPX estimate of tomorrow's range is low at 1836 and high of 1890 for ES and +6 for SPX. I will sell bear call spread at my levels and try to exit losing positions in Etrade and IB personal when we push up. I may sell put far OTM and time if we can hold today's low and margin allows.
2. VIX. I will take stop of 23 bear calls at 2-2.5X losses tomorrow or no later than Monday.
3. Grains. I will close as many put positions as I can. I may then buy some calls for next month if grains price pattern hold. It may be better wait until Monday to void weekend time decays.
Soybean and corn had a slight up day but are still a consolidation mode. Wheat popped another 10 points on Australia weather and Brazil wheat demand. I feel so bad to let most of my winning puts become lessors just because I believe they will go down after last Friday's USDA report. I refused to change my market views when prices kept going up and seasonal windows passed. I was heavily influenced by Arlan and Walsh's "expert commentaries". The retest of lows may still come but not in my time frame.
My plan for tomorrow:
1. ES/SPX, We may still get a range day with upside bias due to the option expiration. A downward test is also possible with any bad new and the market is still nervous. Many people think the selling is not over yet. I looked back SPX pull back from 2012. Most of them lasted 4-6 weeks. We are in our 4th weeks now. My ES/SPX estimate of tomorrow's range is low at 1836 and high of 1890 for ES and +6 for SPX. I will sell bear call spread at my levels and try to exit losing positions in Etrade and IB personal when we push up. I may sell put far OTM and time if we can hold today's low and margin allows.
2. VIX. I will take stop of 23 bear calls at 2-2.5X losses tomorrow or no later than Monday.
3. Grains. I will close as many put positions as I can. I may then buy some calls for next month if grains price pattern hold. It may be better wait until Monday to void weekend time decays.
Wednesday, October 15, 2014
Capitulation? 10-15-14
My hypotheses of downside for indices played out to the extreme today. Indices gaped down over 2% this morning. ES/SPX reached 3% down on 2nd push before Fed Beige Book at 2pm. I wasn't prepared to see such nasty sell off. SPX recovered 2% of its loss from 1821 to 1862. My margin was below $30K at one time. I closed some of my grain positions with a small profit to raise my margin. It looks like the low of this sell off is in if bulls can hold it on an retest. SPX is still hanging on the 50 SMA weekly which I mentioned as a support twice since June, 2012. I didn't get any chance to exit my credit spreads since the gap down overnight. One shortcoming of trading SPX is no overnight session to prevent a big gap up or down.
Grains have shown some weakness at closing today. But they short term uptrend is still intact. I closed couple wheat and soybean puts to free margin and lock in some profits. I also bought calls in each of my grains to hedge my heavy short positions.
I will exit SPX 1800 spreads tomorrow either way. This Friday is monthly expiration and it could go wild. Previously they were up most time but this time was a down trend. I will observe the price actions tomorrow. I may also close my 1860, 1850 put spread at b/e or a small gain just to step aside.
I want to exit most of this month's puts in grains. I kind of suspect the pros have been reloading short while squeezing others out. Of course my 1st objective is to preserve capital. All of my corn put profit slipped out. That is a hard lesson due to my ignorance.
Grains have shown some weakness at closing today. But they short term uptrend is still intact. I closed couple wheat and soybean puts to free margin and lock in some profits. I also bought calls in each of my grains to hedge my heavy short positions.
I will exit SPX 1800 spreads tomorrow either way. This Friday is monthly expiration and it could go wild. Previously they were up most time but this time was a down trend. I will observe the price actions tomorrow. I may also close my 1860, 1850 put spread at b/e or a small gain just to step aside.
I want to exit most of this month's puts in grains. I kind of suspect the pros have been reloading short while squeezing others out. Of course my 1st objective is to preserve capital. All of my corn put profit slipped out. That is a hard lesson due to my ignorance.
Tuesday, October 14, 2014
Bounce 10-14-14
Indices bounced into prior day's range but mostly in the lower part of profile. Even such a weak bounce got pushed down in the afternoon. ES/SPX closed below their 200MA for the 2nd day now. It looks to me the sell off has another leg down. SPX is still hanging around its Fib 62% on weekly and 78% may be tested. RUT had a nice 1.17% up day although it was faded from above 2%. Let's watch if RUT can lead market up since it was the first went down back in July. I filled a RUT week 5 bear call for the 2nd leg of Iron Condor in IB personal account. QII account didn't get filled due to my late placement. I need to have a better working process during the market hours. I am more responsive than initiative. May work on it this weekend.
I was still not aggressive enough to exit my 1880 credit spreads. It was close but SPX got faded in the afternoon. I didn't promptly adjust my exit price before I left for school. It's now ITM again. I will work on it aggressively tomorrow.
Grains broke out Friday's high set after USDA report. Corn had the strongest gain of 2.6% and close at the high. All these moves were unexpected. I failed to take actions to protect my profit. I was so sure that I was going to catch a big fish this time. I ended up empty handed for Oct. I exited couple of wheat and soybean Dec and March for rollover and locking in some profit.
My plan for tomorrow:
1. SPX/ES. I will try to exit my SPX 1880 credit spread if we get a bounce near or break today's high. Also exit ES 1850 week 4 in S-5 and try to sell another far OTM and at least 3 weeks out. SPX's downside target is around 1860 which is Fib 78% RT and the end of resistance area. This is also the 50 SMA weekly which provided support for the last two times. The upside targets are today's of 1899 and 200 SMA at 1906. I will sell another set of bull put spread far OTM and time in both IB and Etrade if we get to the lower target.
2. Watch VIX 23 and 25 for possible stop loss. They are over 1x but below 2x losses for now.
3. Exit some grains' bear call positions to release some margin, especially in wheat and soybean. My available margin is down to $36K which may withstand one more shock but not two.
I was still not aggressive enough to exit my 1880 credit spreads. It was close but SPX got faded in the afternoon. I didn't promptly adjust my exit price before I left for school. It's now ITM again. I will work on it aggressively tomorrow.
Grains broke out Friday's high set after USDA report. Corn had the strongest gain of 2.6% and close at the high. All these moves were unexpected. I failed to take actions to protect my profit. I was so sure that I was going to catch a big fish this time. I ended up empty handed for Oct. I exited couple of wheat and soybean Dec and March for rollover and locking in some profit.
My plan for tomorrow:
1. SPX/ES. I will try to exit my SPX 1880 credit spread if we get a bounce near or break today's high. Also exit ES 1850 week 4 in S-5 and try to sell another far OTM and at least 3 weeks out. SPX's downside target is around 1860 which is Fib 78% RT and the end of resistance area. This is also the 50 SMA weekly which provided support for the last two times. The upside targets are today's of 1899 and 200 SMA at 1906. I will sell another set of bull put spread far OTM and time in both IB and Etrade if we get to the lower target.
2. Watch VIX 23 and 25 for possible stop loss. They are over 1x but below 2x losses for now.
3. Exit some grains' bear call positions to release some margin, especially in wheat and soybean. My available margin is down to $36K which may withstand one more shock but not two.
Monday, October 13, 2014
Another Sell Off 10-13-14
ES/S&P had a bear flag pattern overnight. It was holding in the CLVA which I identified in last night planning. It couldn't get back into last Friday's range and the rug was pulled in the last hour of RTH. It went down tested the bottom of CLVA of 1863. I followed my plan to exit 1880 early at 1.7X loss. I then entered Nov 7, 1790. The exit was right on spot but the rollover was way before the rug pull so it's under water now. On the other hand my SPX credit spread didn't get fill. I was too conservative and wanted a break even because SPX looked held up for most of the day. RUT surprisingly held up well today with only 4 points, 0.38% down while SPX lost 31 points, 1.65%. Is it implying for something? We will find out soon. My practice of patience helped today. I didn't place any credit spreads in trying to catch a bottom. I didn't pull the trigger for VIX leg up either. I was suspicious SPX might pull a rug since it couldn't get back in to prior day's range before I left to pick up Alissa at 3pm.
Grains came up to retest the highs of last Friday after the USDA report. I exited my corn calls for a loss. I am also out half of my wheat call for a b/e. I didn't get any chance to exit my puts since they were all up. I still believe the lows are not set yet. But I don't know how long the short squeeze will last either. I will have to take stops for this month's puts tomorrow. I will retry puts or bear calls when the down trend resume and confirm. My margin is below $50k and need to watch out my levels in case of an extreme situation.
My plan for tomorrow.
1. Still try to exit SPX 1880 on any bounce since I had 1820 in as an replacement which I forgot last night.
2. Get ready to take stop for VIX 23 and 25, prepare to leg up for partial recovery. VIX future set this year's new high at 22.80 indicating this time is more volatile then any pull back of 2014.
3. Take stops for grains puts of Oct. Save some dough first and wait for the down trend resume. Time is not on my side. A down turn confirmation would be break of prior day's low.
4. Sell indices bear calls when there is a pop.
Remember that nothing is for sure in trading until a trade is closed. Protect the capital first.
Grains came up to retest the highs of last Friday after the USDA report. I exited my corn calls for a loss. I am also out half of my wheat call for a b/e. I didn't get any chance to exit my puts since they were all up. I still believe the lows are not set yet. But I don't know how long the short squeeze will last either. I will have to take stops for this month's puts tomorrow. I will retry puts or bear calls when the down trend resume and confirm. My margin is below $50k and need to watch out my levels in case of an extreme situation.
My plan for tomorrow.
1. Still try to exit SPX 1880 on any bounce since I had 1820 in as an replacement which I forgot last night.
2. Get ready to take stop for VIX 23 and 25, prepare to leg up for partial recovery. VIX future set this year's new high at 22.80 indicating this time is more volatile then any pull back of 2014.
3. Take stops for grains puts of Oct. Save some dough first and wait for the down trend resume. Time is not on my side. A down turn confirmation would be break of prior day's low.
4. Sell indices bear calls when there is a pop.
Remember that nothing is for sure in trading until a trade is closed. Protect the capital first.
Start Planning 10-13-14
My plans for 10-13-14 on this Sunday 10-12-14
ES gaped down 10 points on Sunday night. It's hanging on this CLVA of 1868-1890. It's likely to cause SPX gap down on Monday morning unless European markets open with a big push up. Right now ES is outside of its BBL but RSI is still at 30 which is not quiet oversold yet. Fib 50% target of daily is at 1871 and CLVA low is at 1868 along with a trend line. I have ES bull puts of 1880 for next two weeks which are near money. Their premiums are at 4X losses. I will deal with this week's loss first. I will buy it back later tomorrow or when the trend of the day is clear. I will then sell a bull put 25-30 days out for $10-12 to recover a little more than 50% of the loss.
In SPX portfolio, a 1880 bull puts spreads in IB personal is in danger now since SPX was closed at 1906 down 22 points, 1.15% on last Friday. This order was entered before the sell off but a boredom trade since there was no volatility. I was eager to fill in the 2nd leg of I-Condor. Although a reversal shooting star bar was put in the day before but the price failed to close above BBM. I could have waited to the close to see a more clear trend. Anyway, I have to prepare to take stops for this position. Right now it's set at a -$4.65 spread per contract and I have 3 of them. My loss would be $370 each between 3-4X of my collected premiums.
VIX surged to 20.60 on Friday and is outside of BBH on both weekly and daily charts. However, my positions of 23 and 25 could be in danger now. I will leg up and prepare to take stops. I had couple of leg ups which were entered too early on Friday.
Grains opened lower on Sunday night but popped back to Friday's ranges before mid night now. I don't know if it's any news related. Right now the weather is a major factor that trade watches. Walsh Trading is still expecting a retest of contract low or a new low. I will set my current objectives of my Oct puts to break even since the USDA report didn't produce a sell off. We may have a season low for wheat now until Nov according to 10 yr seasonal. I may give corn and soybean a little more time until harvesting over 30% of completion.
ES gaped down 10 points on Sunday night. It's hanging on this CLVA of 1868-1890. It's likely to cause SPX gap down on Monday morning unless European markets open with a big push up. Right now ES is outside of its BBL but RSI is still at 30 which is not quiet oversold yet. Fib 50% target of daily is at 1871 and CLVA low is at 1868 along with a trend line. I have ES bull puts of 1880 for next two weeks which are near money. Their premiums are at 4X losses. I will deal with this week's loss first. I will buy it back later tomorrow or when the trend of the day is clear. I will then sell a bull put 25-30 days out for $10-12 to recover a little more than 50% of the loss.
In SPX portfolio, a 1880 bull puts spreads in IB personal is in danger now since SPX was closed at 1906 down 22 points, 1.15% on last Friday. This order was entered before the sell off but a boredom trade since there was no volatility. I was eager to fill in the 2nd leg of I-Condor. Although a reversal shooting star bar was put in the day before but the price failed to close above BBM. I could have waited to the close to see a more clear trend. Anyway, I have to prepare to take stops for this position. Right now it's set at a -$4.65 spread per contract and I have 3 of them. My loss would be $370 each between 3-4X of my collected premiums.
VIX surged to 20.60 on Friday and is outside of BBH on both weekly and daily charts. However, my positions of 23 and 25 could be in danger now. I will leg up and prepare to take stops. I had couple of leg ups which were entered too early on Friday.
Grains opened lower on Sunday night but popped back to Friday's ranges before mid night now. I don't know if it's any news related. Right now the weather is a major factor that trade watches. Walsh Trading is still expecting a retest of contract low or a new low. I will set my current objectives of my Oct puts to break even since the USDA report didn't produce a sell off. We may have a season low for wheat now until Nov according to 10 yr seasonal. I may give corn and soybean a little more time until harvesting over 30% of completion.
Saturday, October 11, 2014
Weekly Review 10-11-14
Bears finally won the battle with help of Ebola and European economy slowing down. Volatility went through the roof. Indices had 1% movement four out of five days for the week. SPX/ES had two engulfing days back to back. I only remember another similar instance this year. All of my indices options expired worthless with 1005 profit of $2.6K since no grains options expiration. But we are in the early stage of a pull back or correction. I am prepared to take stops for some endangered positions.
The long waited USDA Oct WASDE and Production report released. The report had less bearish numbers but didn't generate the kind of seasonal lows I expected and positioned for. So many of my puts in corn and wheat are underwater now. I am still leaning toward that grains may retest contract lows. However I am under the pressure of time decay for my Oct puts. I may have to take losses with my far OTM positions and hold on to ITM positions for recovery.
The week's right, wrong and goals:
Rightness:
1. I have been patience consciously most of time. The thought of wait to see and step aside come up more often than before. Occasionally I still have impulse actions with sudden market moves.
2. I started to think longer term positions with far OTM and expiration dates. I need to translate it into planning and actions.
Errors:
1. Made two more order entry errors despite one of my last week's goals was to eliminate simple order entry errors.
2. Impulse actions. I still act impulsively when market is hot and I have the urge of do something instead of wait for the dust to settle before any actions.
Goals:
1. Eliminate order entry errors. I must change the habit of close my eyes and click, instead I need to read the entire order before release it.
2. Planning for the day. Have hypotheses of the day in writing for each market I am trading. What platform do I use for the planning? Evernote, blog or pen and paper? This is one step toward my expected professionalism.
3. Continue to observe my emotional reactions, practice patience and discipline.
The long waited USDA Oct WASDE and Production report released. The report had less bearish numbers but didn't generate the kind of seasonal lows I expected and positioned for. So many of my puts in corn and wheat are underwater now. I am still leaning toward that grains may retest contract lows. However I am under the pressure of time decay for my Oct puts. I may have to take losses with my far OTM positions and hold on to ITM positions for recovery.
The week's right, wrong and goals:
Rightness:
1. I have been patience consciously most of time. The thought of wait to see and step aside come up more often than before. Occasionally I still have impulse actions with sudden market moves.
2. I started to think longer term positions with far OTM and expiration dates. I need to translate it into planning and actions.
Errors:
1. Made two more order entry errors despite one of my last week's goals was to eliminate simple order entry errors.
2. Impulse actions. I still act impulsively when market is hot and I have the urge of do something instead of wait for the dust to settle before any actions.
Goals:
1. Eliminate order entry errors. I must change the habit of close my eyes and click, instead I need to read the entire order before release it.
2. Planning for the day. Have hypotheses of the day in writing for each market I am trading. What platform do I use for the planning? Evernote, blog or pen and paper? This is one step toward my expected professionalism.
3. Continue to observe my emotional reactions, practice patience and discipline.
Friday, October 10, 2014
Another Blood Bath 10-10-14
It was the forth day of over 1% move in ES/SPX. I was expecting a day of consolidation considering that the market will close on Columbus Day on Monday and Henry from John Carter's service indicating that every Friday the week before options expiration was a turn around day for the last many months. Indices were holding up well until 2pm. ES closed at 1900 and SPX closed right at its 200 SMA, 1904. I was pretty calm until the last hour. I added 2 VIX to let up my positions in both IB accounts but only to see them got crashed in the last 30 min sell off. I had two SPX bull puts filled in the last hour which were planed this morning. I will try to avoid near term bull puts and look for selling opportunities far out of money and date. In the meantime get ready to take stops base on my rules.
Grains didn't react to as volatile as I had expected after USDA report. The report was better than trade expected in terms of production yield and ending stocks. After initial pop corn and soybean fall 2.9% and 2% respectively. Both are still way above their contract lows. Wheat was up 1% as USDA estimated lower ending stocks and higher demand. None of my pre-set orders got filled. As I am still adjusting to the notion of "Nothing is for certain in trading". Get to be prepared for an opposite result whenever feels so sure about the market.
Will have more in my weekly reviews tomorrow.
Grains didn't react to as volatile as I had expected after USDA report. The report was better than trade expected in terms of production yield and ending stocks. After initial pop corn and soybean fall 2.9% and 2% respectively. Both are still way above their contract lows. Wheat was up 1% as USDA estimated lower ending stocks and higher demand. None of my pre-set orders got filled. As I am still adjusting to the notion of "Nothing is for certain in trading". Get to be prepared for an opposite result whenever feels so sure about the market.
Will have more in my weekly reviews tomorrow.
Thursday, October 9, 2014
Nothing Is Certain In Trading 10-9-14
After yesterday's run up which closed above prior day's high, I noted that the bottom was in after a swift rejection of retesting low in my journal last night. I expected a push down into yesterday's upper range and buyers would step in to continue the upward thrust. I was pretty confident about my hypotheses until early afternoon. There was no strong reactions at each support level. So we ended with a bearish engulfing bar after the bullish engulfing bar yesterday. It has been volatile for the last few days. The SPX 200 SMA is about 20 point below and we may test it very soon. I had a SPX and RUT bull puts spread filled for Oct week 4 and 5.
Grain market is having the same unexpected behaves opposite to indices. Corn and soybean held up well today despite generally expected a bearish USDA report tomorrow. I bought 2 corn 360 call this month to hedge my all bear positions just in case we get an unexpected price action tomorrow. I have enough bull puts in soybean and wheat for now.
Quote of the Day: Nothing is for certain in trading until your positions are closed.
Grain market is having the same unexpected behaves opposite to indices. Corn and soybean held up well today despite generally expected a bearish USDA report tomorrow. I bought 2 corn 360 call this month to hedge my all bear positions just in case we get an unexpected price action tomorrow. I have enough bull puts in soybean and wheat for now.
Quote of the Day: Nothing is for certain in trading until your positions are closed.
Wednesday, October 8, 2014
A Scary Retest of Bottom 10-8-14
SPX/ES followed through yesterday's selling right after open. It went 1 tick over the low of Oct 2 and met with buyers. Bulls took it back to yesterday's low before Fed min release. I suspected sellers won't go too far since the Fed min was a risk factor for both sides. The price movements were measured and well timed. With the double bottom and both swift rejections I would assume this sell of is over for now. With the earning season starting we may see another leg up now. I followed my plan before I went for my dermatologist appointment. My plan was to exit my ES 1900 Oct 10 with a small profit to release my margin in S-5 to enter another contract. It played out fine. I entered another bull put for week 3 at 1850. The 1900 was a boredom trade to begin with anyway. But I made another similar mistake in RUT before closing. I wanted to catch a bull put when the low rejection was clear. I measured a bear call of 1160 for $95X5 as a 2nd leg of my Iron Condor. I forgot to enter a - sign to get a credit and the order went in as a debit. So I got filled with market/offer at 40C. As I remembered I wasn't excited but rushed to place the order before closing bell. This is the 2nd time this week I made mistakes in order entries. My last error trade was out today unscratched. A mistake is still a mistake even it's profitable.
Corn and wheat made new highs defining the trend on weather and oversold conditions. US dollar retreat helped the raise too. Soybean broke yesterday's low forming a HS formation. I suspect grains would end the short squeezing and profit taking by tomorrow. I plan to exit my OTM puts after tomorrow's report and be done by next week. The seasonal low for corn and soybean could be set by next week. Wheat has another low in Nov according to seasonal charts.
Corn and wheat made new highs defining the trend on weather and oversold conditions. US dollar retreat helped the raise too. Soybean broke yesterday's low forming a HS formation. I suspect grains would end the short squeezing and profit taking by tomorrow. I plan to exit my OTM puts after tomorrow's report and be done by next week. The seasonal low for corn and soybean could be set by next week. Wheat has another low in Nov according to seasonal charts.
Tuesday, October 7, 2014
One Pattern Over Another 10-7-14
I didn't expect SPX to have another sell off after last Friday's V shaped rejection of lows. It was a perfect IHS pattern even at the closing of yesterday. Today's sell off in the last hour clearly negated this IHS formation. Now it is more like a symmetry or HS near completion. Is it coming back to retest last week's low and b/o area or resumed selling? We will see it in the next couple of days. RUT looks like ready to make a new low since it closed at last week's low. Two of my RUT bull puts got filled for Oct week 5. Yesterday's misfired RUT Oct wk 4 looks troublesome now. I need to get ride off it soon. I have a dermatologist appointment tomorrow. I should be able to come back before Fed Minute release.
Grains had another big green day today. It looks more than a clear deck now. The driving factors quoted were wet weather delayed harvesting and short covering. Wheat had the strongest up move and I have more puts under water than any other grains now. I will exit the dead ones and hold the rest until this Friday after USDA reports.
Grains had another big green day today. It looks more than a clear deck now. The driving factors quoted were wet weather delayed harvesting and short covering. Wheat had the strongest up move and I have more puts under water than any other grains now. I will exit the dead ones and hold the rest until this Friday after USDA reports.
Monday, October 6, 2014
Grains Cleaning Deck 10-6-14
Grains bounced up today with some strength. Soybean was up almost 3% and corn at 2%. Both of them closed at high of the day. Wheat was up too but closed with a pull back. There were some wet and cold weather conditions over the weekend. Technically I think it was the pros getting ready for this Friday's WASDE and Production Progress report. They are cleaning the deck to make room for next push down.
I took this chance to exit out 2 Jan SB and 1 Dec wheat bull puts based on my general plan. I also sold bear calls for all three grains. My hedging positions are now more than my bull puts. I will consider to lock in some profit of my Dec puts in case a surprising market reaction after Friday's report. One concern is that I don't have any bullish positions in corn.
Indices were slightly down but remained in last Friday's range. They are in a consolidation mode. I filled one Iron Condo 2nd leg in my personal acct. The long term up trend is intact. However, the Sept-Oct down trend in SPX and RUT are not reversed yet. I will watch them carefully in next few days.
I made two stupid order entry mistakes today. I don't remember when was the last time I made two similar error in one day. I entered a RUT put spread with 2 levels spread instead of my standard 1 level. It doubled my risk and reduced my return %. I tried to exit it out today but no fill. I will try again tomorrow. Another one was the exit of soybean Jan 960. I didn't look at the price clearly and released it. It got filled with market. This one costed at least $50. I need to have a better procedure and routine for order placement.
I took this chance to exit out 2 Jan SB and 1 Dec wheat bull puts based on my general plan. I also sold bear calls for all three grains. My hedging positions are now more than my bull puts. I will consider to lock in some profit of my Dec puts in case a surprising market reaction after Friday's report. One concern is that I don't have any bullish positions in corn.
Indices were slightly down but remained in last Friday's range. They are in a consolidation mode. I filled one Iron Condo 2nd leg in my personal acct. The long term up trend is intact. However, the Sept-Oct down trend in SPX and RUT are not reversed yet. I will watch them carefully in next few days.
I made two stupid order entry mistakes today. I don't remember when was the last time I made two similar error in one day. I entered a RUT put spread with 2 levels spread instead of my standard 1 level. It doubled my risk and reduced my return %. I tried to exit it out today but no fill. I will try again tomorrow. Another one was the exit of soybean Jan 960. I didn't look at the price clearly and released it. It got filled with market. This one costed at least $50. I need to have a better procedure and routine for order placement.
Sunday, October 5, 2014
Weekly Review 10-5-14
The past week was volatile in equity and quiet in grains. Indices were down in early part of the week but up sharply in the last two days with the better than expected job numbers on Friday. ES & SPX retraced a little more than half of the last down turn and the long term up trend is intact. We should be able to tell if the pull back is over.
Grains were in a consolidation mode awaiting next Friday's WASDE report. It's widely expected the report would set a new low and possible the bottom for this year's grain prices. There have been signs of profit taking and short covering before the report. I am still waiting for the report to exit my puts for this month. Some of my OTM puts in wheat are under now. I may have to take stops as part of my cost of hedging.
My transition from trading naked ES to SPX credit spreads continued last week. I can't say that I have gotten a handle on it yet. My mind set is still hanging on the 1$ credit shred. I will try to take 80c at my level of safety when the volatility reduced.
I didn't see any major mistakes in trading this week. What I did right:
1. Being patience waiting several days for VIX to come to my level of price. It looks like I would be reward for it. Be patience may not always get what I wanted but it will definitely reduce my risk and keep me disciplined.
2. I am more conscious about my emotions whenever I have the urge to chase a trade or move my prices to fill in an order.
Goals of next week:
1. Continue to monitor my emotions during the market movement, pay attentions to the ideas from my subconsciousness when emotions are running high.
2. Be more decisive to follow my rules and plans. Not change them following every price movement. As a experienced trader said: once you laid out a trading rule, follow it strictly.
Grains were in a consolidation mode awaiting next Friday's WASDE report. It's widely expected the report would set a new low and possible the bottom for this year's grain prices. There have been signs of profit taking and short covering before the report. I am still waiting for the report to exit my puts for this month. Some of my OTM puts in wheat are under now. I may have to take stops as part of my cost of hedging.
My transition from trading naked ES to SPX credit spreads continued last week. I can't say that I have gotten a handle on it yet. My mind set is still hanging on the 1$ credit shred. I will try to take 80c at my level of safety when the volatility reduced.
I didn't see any major mistakes in trading this week. What I did right:
1. Being patience waiting several days for VIX to come to my level of price. It looks like I would be reward for it. Be patience may not always get what I wanted but it will definitely reduce my risk and keep me disciplined.
2. I am more conscious about my emotions whenever I have the urge to chase a trade or move my prices to fill in an order.
Goals of next week:
1. Continue to monitor my emotions during the market movement, pay attentions to the ideas from my subconsciousness when emotions are running high.
2. Be more decisive to follow my rules and plans. Not change them following every price movement. As a experienced trader said: once you laid out a trading rule, follow it strictly.
Friday, October 3, 2014
Follow Through 10-3-14
NFP came out much better than expected. ES never looked back to yesterday's range right off the gate. I entered SPX bear calls in all three account right above its all time high for week 3&4 but only week 4 got filled. My decision was based on that SPX price was near BBM line and Fib 50RT daily. There are several resistant levels above it and no strong seasonal tendency for Oct. I am willing to take stop losses at 2-3X of my premiums if I am wrong. It would take me 2-3 more trades to recover my losses. Unlike the grains I have been holding. They will take me 5-10X trades to recover. I also sold an ES bull put in S-5.
Grains had a mixed results. Corn and wheat were up 1C and 3C respectively. Soybean lost the ground unexpectedly. I was debating whether to exit another position out but it failed to stay in o/n range quickly. Wheat appears built a bottom in several higher lows.
Grains had a mixed results. Corn and wheat were up 1C and 3C respectively. Soybean lost the ground unexpectedly. I was debating whether to exit another position out but it failed to stay in o/n range quickly. Wheat appears built a bottom in several higher lows.
Thursday, October 2, 2014
Thursday Reversal? 10-2-14
Bears took the market to another new low of the week in the AM. ES made a low of 1918. Buyers stepped in before noon and pushed it back to yesterday's lower range. It was a 20 point V shaped movement, a calculated low and high before tomorrow's NFP report. I got in two more bull puts in SPX for the next two week expiration on a high VIX note. It appears well timed by luck assuming today's strong low will hold. I also got another set of VIX 25 bear calls at the right time and place.
Grains had a follow through day. I was held back somewhat due to my near $50K margin balance. I only exited one Dec 530 wheat and bought another December 860 put. Soybean and corn closed at high of the day. Is it short covering or clear deck for next Friday's report? I will add more short positions before the report.
Grains had a follow through day. I was held back somewhat due to my near $50K margin balance. I only exited one Dec 530 wheat and bought another December 860 put. Soybean and corn closed at high of the day. Is it short covering or clear deck for next Friday's report? I will add more short positions before the report.
Wednesday, October 1, 2014
Broken Down/Up 10-1-14
Indices broke down on this first day of the month after yesterday's window dressing. All major indexes lost more than one percent. ES touched daily Fib 62RT and no major bounce out of it. It appears from the closing that the selling is not over yet. We may see that bears take a break tomorrow or they could push hard again with some bad news. I filled my 2nd leg of Oct SPX put side in all three of my trading accounts. I left 2 more slots in my Etrade account just in case we have another big selling day. I also sold one set of VIX in each of my IB account. RUT performed worse than the others. I may get another chance to sell a far OTM in next two days. I am more patience and calm now during the heat of selling. I realized that I may have better opportunities in another day if my orders are not filled at the level I feel safe.
Grains broke up today on technical levels. Corn made a new contract low and was near $3. Soybean was near breaking $9 this morning and bounced after making a double bottom. Wheat even broke pre report high of yesterday. It looks like we may see a little more upside before the Oct 10th report. I exited one sb underwater position for Jan and rolled over another one due to the concern of cash level and margin. I am balanced in number of contracts in bull/bear ratio in sb and wheat now. I may buy more puts when and if we get another up day. We haven't had more than two up days for a while. We may see it this time.
Grains broke up today on technical levels. Corn made a new contract low and was near $3. Soybean was near breaking $9 this morning and bounced after making a double bottom. Wheat even broke pre report high of yesterday. It looks like we may see a little more upside before the Oct 10th report. I exited one sb underwater position for Jan and rolled over another one due to the concern of cash level and margin. I am balanced in number of contracts in bull/bear ratio in sb and wheat now. I may buy more puts when and if we get another up day. We haven't had more than two up days for a while. We may see it this time.
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